'The Dropout': The rise and fall of Elizabeth Holmes, Theranos

In podcast and "Nightline" doc, "The Dropout," ABC News' Rebecca Jarvis tells the story of Theranos founder Elizabeth Holmes, accused of defrauding investors. Holmes has pleaded not guilty.
4:52 | 01/23/19

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Transcript for 'The Dropout': The rise and fall of Elizabeth Holmes, Theranos
Thank you, Lara. We move to our cover story. Special investigation into the rise and fall of the woman once called the next Steve jobs. Elizabeth Holmes was riding high, the world's youngest self-made woman billionaire now facing the prospect of decades in prison for fraud. Our business correspondent Rebecca Jarvis here with this. Good morning. A truly remarkable story at the height her company was worth nearly $10 billion. She attracted some of the most powerful people in government to her board and her blood testing technology was inside of Walgreens stores but it all came crashing down and this morning for the first time you're hearing from Elizabeth Holmes under oath. This is the testimony of Elizabeth Holmes going on the record in San Francisco, California, 9:00 A.M. On July 11th, 2017. Ms. Holmes, raise your right hand. Do you swear to tell the truth the whole truth and nothing but the truth? I do. Did. Reporter: This is Elizabeth Holmes seen here in this never before aired testimony. Once a fast rising star in silicon valley she sits across from 12 attorneys under investigation for an alleged elaborate years' long fraud. Did it concern you that a number of tests weren't working on the devices? Reporter: Now facesing up to 20 years in prison. Holmes has pleaded not guilty. It's a stunning fall from grace for the woman who was once poised to change the world. This is a revolutionary company that threatens to change health care. There is no better story than the young woman at Stanford who dropped out because she wanted to save people's lives. Reporter: She was named one of "Time" magazine's 100 most influential people. Wired called her work mind blowing? If she had made this work she would have been the next Steve jobs. Reporter: Her technology promised to run hundreds of tests from just a drop or two of blood. This is the Walgreens. Reporter: It was in Walgreens. Not only did they fool investors but patients and doctors. Reporter: Where breast cancer patients like sherry Acker got bad results. No one from theranos ever called to apologize. No one. Reporter: But it all begins to unravel when in this footage which you're seeing for the very first time, Elizabeth is finally forced to answer to difficult questions under oath with the securities and exchange commission. Did it concern you that a number of tests weren't working on theranos' devices? Reporter: Suddenly the woman who always seemed to have all the answers -- We are the only lab company that is actually really focused on leading with transparency. Reporter: Now had none. I don't know specifically. I'm not sure. I don't know exactly. I just don't know. Reporter: There were those hundreds of tests her signature technology supposedly could perform at Walgreens. How many tests could it run? At that time in 2010? I don't know exactly what the number was. There was probably tens of tests. So when you say tens of tests you mean something less than 100? Yes. Reporter: Dramatic claims she peddled to board members including former secretary of state George Shultz. Was theranos' technology deployed in emergency rooms, hospitals and provider offices? No. Was a theranos manufactured device ever deployed in the battlefield? No. Was it ever deployed in a medevac helicopter? No. Reporter: For the first time the defense representing the former coo of theranos on the record in an in-depth on camera interview. It seems like a central component of your case is that theranos was on the right track and if they had enough time they would have gotten it 100% right. I think eventually the company would have been a great success if it had been allowed to run. When it comes to our health, people want to know it's 100% accurate day one. They want to know that what's inside of a Walgreens or at their doctor's office can actually do what it says it will do. You know, Rebecca, of course that's true. I think, though, the unfortunate thing is that in our system of health care, there's mistakes that are made every day. There's no perfect answer. Reporter: Elizabeth Holmes is now awaiting trial. She faces criminal charges from the department of justice, she's pleaded not guilty. She is back at home in California and some insiders tell us that right now she is already seeking money to start her next company. Boy, she was such a rock star at the height of all this. And getting so much attention and in Walgreens this touched so many live. It did. Thsp a lot more of your report tonight on "Nightline." It is really something.

This transcript has been automatically generated and may not be 100% accurate.

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